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Looming Royalty Decision Threatens iTunes Store, Apple Hints

Posted by timothy on from the but-each-penny-is-only-wafer-thin dept.

eldavojohn writes "You may recall us discussing some legislation about online music. More decisions are being made that may affect how much money Apple must impart to labels and musicians. Right now, it's 9 cents a track — which adds up, when you sell 2.4 billion tracks each year. The Copyright Royalty Board is asking for 15 cents a track (66% increase) and Apple isn't going to agree." Reader scorp1us points out a similar article at CNN; both stories mention that Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store. Update: 10/02 21:03 GMT by T : According to CNet, the rate has been officially frozen at 9.1 cents per track.

21 of 279 comments (clear)

  1. I Wanted More Anti-DRM Spin on This by eldavojohn · · Score: 5, Interesting

    Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store.

    More importantly, what of the client software that interacts with the store? You know, the program that allows you to burn/listen/store "your" music?

    As the user who submitted this article, I would like to point out that they removed my DRM fear mongering from my original submission. As a geek it's my duty to squeal like a stuck pig when troubles a brewin' and I think there's a rude awakening looming for a whole ton of iTunes users.

    Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents. Hell, I have no way of knowing that this isn't already implemented in iTunes and Apple need only stop delivering the other half of keys to the clients to decrypt a user's data.

    And that's why DRM has failed, continues to fail and will always fail. Nobody read the EULA/TOS of iTunes and nobody understands that when you're "buying" the song for a dollar, you're not buying anything but the right to listen to that song for some undetermined amount of time. Here's a simple case: What happens to "your songs" when you die?

    Burn them to discs or convert them to an open format anyway you know possible, folks. That's the only advice I have--especially with this on the horizon. Buy Apple players, Amazon MP3s and look no further than the GPL for your software.

    --
    My work here is dung.
    1. Re:I Wanted More Anti-DRM Spin on This by Reivec · · Score: 4, Insightful

      Anyone that buys DRM music deserves the backlash. I am one of those annoying guys that told everyone he knew to not use the legal music stores, not because I like to steal, but because they would surely find themselves unable to listen to the music they purchased. This has already happened to my cousin to bought through the walmart service, then had to reinstall her computer, then replaced her computer, and had all sorts of issues getting the rights to play her music again. I think she got that resolved, but you shouldn't even have to go through all that.

      I only listen to music not related to the RIAA and have done so for many years now. I find that I still find many songs I think are great and love to listen to, and never have to worry about being screwed over. And yes, I do buy CDs and songs, fairly often even.

    2. Re:I Wanted More Anti-DRM Spin on This by Ironsides · · Score: 5, Informative

      Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents.

      Um, what? Are you trying to spin it such that people who bought the songs at 0.99 would have to pay another 0.06 in order to continue playing songs that they already licensed? That's not going to happen. Aside from violating the existing license, it would trigger a massive lawsuit against apple. The license for the existing songs has been paid, the terms can't be changed.

      --
      Fly me to the moon Let me sing among those stars Let me see what spring is like On jupiter and mars
    3. Re:I Wanted More Anti-DRM Spin on This by eldavojohn · · Score: 4, Informative

      I'm assuming that's because what you said was unfounded, but more importantly completely ridiculous.

      Yeah, completely ridiculous. Alright, here's the TOS:

      d. You acknowledge that some aspects of the Service, Products, and administering of the Usage Rules entails the ongoing involvement of Apple. Accordingly, in the event that Apple changes any part of the Service or discontinues the Service, which Apple may do at its election, you acknowledge that you may no longer be able to use Products to the same extent as prior to such change or discontinuation, and that Apple shall have no liability to you in such case.

      But it's completely ridiculous that I start to talk about them electing to discontinue your right to use the product. Completely.

      Couple that with the fact that Apple pulled the $1 pricing scheme out of it's ass as well as the RIAA being a legion of lawyers and I think we've got ourselves the perfect storm. Of course, that's just completely ridiculous.

      You can't retroactively revoke access to something that was already sold ...

      Nothing was sold. Something was "licensed" temporarily to you in the very loosest sense of the word. By saying "sold" are you saying I now own the rights to the music I buy on iTunes? No, it follows the TOS which I pointed out is full of red alarms.

      --
      My work here is dung.
    4. Re:I Wanted More Anti-DRM Spin on This by Creepy+Crawler · · Score: 4, Insightful

      That's why I pirate.

      Services that sell physical media have quantities of bad-ware and other anti-user software.
      Services that sell online media promise nothing, including playing tomorrow.

      Piraters guarantee good quality product that will 10 years from now. They also happen to be free.

      Media corps, give me a good reason why I should put MY money through a shredder and buy locked down, limited term, no liability media. If not, fuck off torrents, IRC, and sneakernet work great for me.

      --
    5. Re:I Wanted More Anti-DRM Spin on This by falcon5768 · · Score: 4, Interesting
      except Apple has very clearly put clauses in their agreement with iTunes music buyers that if the store where to close they will bomb the DRM thus freeing your music completely.

      I am sure the labels realize this and are fearful Apple might actually pull it off.

      --

      "Slashdot, where telling the truth is overrated but lying is insightful."

    6. Re:I Wanted More Anti-DRM Spin on This by earlymon · · Score: 5, Informative

      Sorry for previous post, in my mind I totally hit preview instead of submit.

      As someone who has actually RTFA, Apple didn't hint that this change would shut down the iTMS - they said flat out that IF they ABSORBED the higher cost, THEN THAT would be so detrimental they'd have to shut down - and that there was NO WAY THAT THEY WOULD DO THAT.

      Expert fear mongering, indeed. Allow me to accurately paraphrase for you.

      1. Apple said that they wouldn't absorb additional costs - it was ridiculous to the point of causing an iTMS shutdown.
      2. Apple said that shutting down iTMS is ridiculous.
      3. The iTMS Terms of Sale is on the web. I'll post the link for those can read: http://www.apple.com/legal/itunes/us/sales.html
      4. Ditto for their Terms of Service: http://www.apple.com/legal/itunes/us/service.html
      5. NO WHERE DOES IT STATE THAT YOUR MUSIC PURCHASES ARE GOOD FOR "some undetermined amount of time."
      6. iTMS TOS is governed by the laws of the State of California, USA
      7. It strains reasonable imagination to the breaking point that any California court would uphold the insane scenario you present.
      8. Your DRM fear mongering seems to completely overlook Apple's historical stance on DRM. From the fossil record:

      From http://www.apple.com/hotnews/thoughtsonmusic/

      Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.

      9. iTMS content continues to play when one has no connection to the internet.
      10. Point 9, above is an excellent simulation of the iTMS going out of business - there would be no internet connection to iTMS, your music would continue to play.

      You, sir, are a total fucking idiot.

      --
      Pathological kinda promises Path + Logical - but instead, you get stuck with pathetic.
    7. Re:I Wanted More Anti-DRM Spin on This by mrchaotica · · Score: 4, Insightful

      Apple has very clearly put clauses in their agreement with iTunes music buyers that if the store where to close they will bomb the DRM thus freeing your music completely.

      [citation needed] x 2

      --

      "[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz

  2. Complete Shutdown of iTunes Music Store? by sexconker · · Score: 4, Interesting

    Yeah, right.
    Call their bluff, require 15 cents.
    iTunes Music Store isn't going anywhere.
    If anything, prices will go up a dime. (Yes, for a 6 cent increase.)

  3. Amazing... by paulevans · · Score: 4, Insightful

    Our music in on iTunes, and they get a cut of it. Wow, Thanks Royalty Board! Thanks for taking more of our cut . . . for doing . . . nothing to help us.

    --
    "When I want your opinion, I'll give it to you." --leonstryker
    1. Re:Amazing... by necro2607 · · Score: 4, Interesting

      Hmm good point. My band's music is on iTunes, as well as that of tons of other bands I know, who are completely independent. We got our stuff onto iTunes through TuneCore who charge a pretty nominal yearly fee. No record label involved. They also don't take any cut of royalties sent from Apple. So, if any of that $0.99 is going to anyone other than either Apple or my band, somethin is screwed up there :P

    2. Re:Amazing... by TheLink · · Score: 5, Interesting

      Yeah. There's this organisation in my country that goes around collecting money from restaurants etc.

      http://www.ppm.org.my/v2/downloads/quoteEN.jpg

      I wonder what happens if a restaurant only plays music that I compose (I'm not a member and the last I checked I am not getting any money or royalties from them).

      I also wonder where the royalties are really going and what the pie slices look like ;).

      --
  4. A complex game by stox · · Score: 5, Insightful

    Apple is playing chicken with the Music Industry, and IMHO, rightfully so. The record companies should eat the increase in the royalty instead of passing it on to the consumer. They provide little value for the huge portion of the income they get already.

    --
    "To those who are overly cautious, everything is impossible. "
  5. Price breakdown by Elfboy · · Score: 5, Insightful

    Apple pays an estimated 70 cents of every dollar it collects per song to the record companies responsible for each track. The record companies turn over nine cents to the music publishers who control the copyrights to these tunes.

    So why can't the record companies absorb the extra 6 cents? Oh wait. They're greedy bastards...

    --
    * We dance where angels fear to tread *
  6. Good by superdan2k · · Score: 4, Insightful

    I think what's going to get missed in this is a "good for Apple!" variety of statement. They've created a whole new market for music, and provided a whole new revenue stream for the industry. That they've stood up to that industry previously on the issue of cost-per-track is admirable. Now they're willing to drop a whole channel that makes them a ton of money in order to hit back at the music industry's greed when most vendors would just bend over and take it.

    --
    blog |
  7. Why would this apply to already purchased music? by argent · · Score: 5, Insightful

    Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents.

    Why on earth would this apply to songs you've already bought? This is an additional royalty for new songs, making them cost 1.05 or making Apple push back on the labels to take the extra royalty out of their share...

    Yes, you definitely need to turn "Rip Mix Burn" around to "Mix Burn Rip" and get CDR backups of all your iTunes music ANYWAY.

    But at least iTunes DRM is "honor system" level... I mean, really, it gets downloaded unencrypted and the DRM is applied by the local client. And they haven't made any attempt to close the digital hole. Imagine how much it would suck if the labels had gotten everything they wanted from Apple like they have from Microsoft?

  8. Someone makes Apple look saintly by David+Gerard · · Score: 4, Insightful

    Apple is evil, but the music business is evil and stupid. If you were going to pick someone to make Apple look good, you couldn't pick better villains.

    Do the record companies realise they're competing with free? Apple realise this. Raising the prices will drive away customers who do have another option. No-one buys music because it's the only way to get it, anyone who buys music these days does so because they want to.

    BitTorrent: because fuck you, Hollywood!

    --
    http://rocknerd.co.uk
  9. What, even eMusic? by argent · · Score: 4, Insightful

    I am one of those annoying guys that told everyone he knew to not use the legal music stores

    What, even ones like eMusic that don't ship DRMed music and never shipped DRMed music?

    That's not just annoying, that's irresponsible.

    1. Re:What, even eMusic? by cyber-dragon.net · · Score: 4, Interesting

      I buy things from iTunes knowing the risks of DRM specifically because it pisses off the RIAA and MPAA that they have to deal with Apple.

      It amuses me NBC caved and put their TV back on iTunes because they lost so much revenue.

      Am I wasting my money? Yeah probably. But lots of people also pay $10 to go to a movie for an hour and a half. I pay $2 an hour so seems like a half price entertainment deal, and I get to re-watch mine until something happens.

    2. Re:What, even eMusic? by sanyacid · · Score: 5, Informative

      Aside from emusic which rules for indie picks - with amazonmp3 out there, I can't understand why anyone would buy any drm music period any more.

      Let me clear this up for you:
      "Please note that Amazon MP3 is currently only available to US customers."

  10. Re:Problem is by sexconker · · Score: 5, Insightful

    By "magical" he means there is no logic involved, and people are idiots.